By Simon Cavell, Director & Head of Consulting, Johnston Carmichael

The branch is being reinvented for a new generation.  Mobile apps and digital servicing have reinvigorated the role of building societies on the high street.  

That feels counterintuitive, especially given some of the data points – declining footfall, transactions migrating online, neobanks and challengers without a physical presence.

But for UK building societies, the future of the branch is transformation, not extinction. Societies that understand this will emerge with stronger member relationships, higher levels of trust, and a genuinely differentiated competitive position. 

The key questions are what kind of branches to have, and what role they play.

A member-led case for branches

Customers rightly value the convenience, access, and control of mobile banking.  Organisations value the cost, journey management, and agility.  We now carry a bank in our pocket, available 24:7.

But focusing exclusively on this ‘new norm’ misses something important.  

Mutuality remains a major strategic asset and branch is one of the most powerful physical expressions of that.  A source of real differentiation, today’s members can walk into thousands of spaces across the UK and speak to someone whose organisation is, structurally, on their side. 

Transactional activity – withdrawals, deposits, balance enquiries, transfers – was never what branches did best. Digital channels are faster, cheaper, and more convenient.    

With less emphasis on the counter, Branch colleagues are now more able to focus on what they alone can do: complex conversations, relationship building, and the nuanced human judgement that algorithms can’t replicate.

An engaging colleague who takes time to explain a situation clearly and without agenda. The branch is where that conversation happens – where trust is built.

Broader strategic value of a retail network

Forward-thinking organisations are already reimagining branches.  Rather than transactional hubs, reframing as a community-based financial wellbeing centre opens up compelling opportunities.

Relationship depth.  Investing in the skills of expert colleagues – savings specialists, mortgage advisers, financial wellbeing coaches – is a differentiator, not a cost. When an overwhelmed first-time buyer walks in, the Society that provides clear, unhurried, expert guidance earns both a product sale and a member for life.

Personal, empathetic interactions surface needs and offer reassurance.  Building deep-rooted brand loyalty will reduce customer churn in the long run. 

Community presence.  With authentic local roots, branches build brand equity and social capital that no volume of digital advertising can replicate.  A high-street presence is a permanent billboard – signalling permanence, stability, and a genuine commitment to the local area.

Leveraging their prime locations, Branches can be a marketplace for ideas – financial education events, partnering with local employers on workplace savings, or supporting housing associations and local councils with shared ownership and affordable housing schemes.  They can offer space to local businesses (e.g. mortgage intermediaries, solicitors), charitable ventures (e.g. health, wellbeing), or wider services (e.g. Citizens Advice).  Branch colleagues could take on more of a business development role, building relationships with local mortgage brokers.

Brand and heritage are typically trusted; the colleagues more so.  And with development opportunities for local residents, the branch becomes a compelling entry point for careers.  Hybrid working opens up access to more and varied types of roles.

Vulnerable customer support.  Many customers face acute challenges, whether financial education, anxiety, or difficulty.  Again, Branches offer something unique: a face-to-face environment where colleagues can identify signs of financial distress, cognitive difficulty, or coercive control, before responding with care.

Physical branches remain an essential lifeline for digitally-excluded members, elderly demographics, and those requiring specialised support.  It’s a role signposted by the FCA’s Consumer Duty and regulatory expectations around vulnerable customers will rightly intensify.  But positioning branches as safe spaces for members is both a commercial opportunity and a direct expression of the mutual mission.

Branch vs Digital?  It’s misleading to frame this as a competition.  Most effective models integrate the two channels seamlessly, each playing to its strengths.  A member might initiate an application online, contact the branch to seek help, and then complete documentation digitally. The branch becomes one thoughtfully-designed stage in a joined-up member journey — not a silo competing against its digital counterpart.

And given the intention to increase digital adoption, that face-to-face support and problem solving helps those customers who may not be natural users of mobile banking services.

Location, Location, Location.  Today’s ideal network could be smaller than twenty years ago, but individual branches should be better designed, staffed, and integrated into the overall service model.

This needs a pragmatic look at geography and differentiated types of propositions.  Locations could warrant a transaction-orientated branch, an ‘experience-led’ engagement hub, a community-led model, or even collaboration with a local business.  Operating models may vary – opening hours, number of colleagues, capabilities, products, services offered.  Branch configuration should reflect local needs, not ‘one size fits all’.

Strategic management of property, whether owned or leased, should maximise the cost:benefit of each location.  As a strategic asset, Societies should invest to create spaces that members actively want to spend time in – welcoming, well-designed, and unambiguously focused on conversation and support (rather than queuing and form-filling).

What’s ahead?

The future of the branch network is a strategic question that reflects the heritage and purpose of the mutual movement.  It requires conviction – to differentiate from the large retail banks, to invest in physical offices (as well as digital), and to demonstrate why human connections still matter profoundly in financial services.

As customers’ habits change, the industry should meet them where they are.  That’ll often be online and a rich array of digital services will continue to grow.  

However, millions of members still turn to their local branch at moments that matter.

The challenge for Societies is to ensure their branches are worthy of that trust - delivering help, community connections, and member experience.

Ultimately, branches may look different or be found in new places.  But organisations that maximise this opportunity will redefine what it means to be a valued financial institution in an era when trust is scarcer, and more commercially significant, than ever.  

Properly reimagined and boldly invested in, your branches remain one of the most powerful competitive advantages for any building society.